Scribd
Upload
15 views3 pages

Tutorial 3

The document is a tutorial sheet for the Operations Research course at Birla Institute of Technology and Science, Pilani, detailing various mathematical problems related to inventory management and production scheduling. It includes questions on economic batch size, production runs, demand calculations, and cost optimization for different scenarios. Each question provides specific data and asks for calculations to determine optimal strategies in inventory and production management.

Uploaded by

fordrash488
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
15 views3 pages

Tutorial 3

The document is a tutorial sheet for the Operations Research course at Birla Institute of Technology and Science, Pilani, detailing various mathematical problems related to inventory management and production scheduling. It includes questions on economic batch size, production runs, demand calculations, and cost optimization for different scenarios. Each question provides specific data and asks for calculations to determine optimal strategies in inventory and production management.

Uploaded by

fordrash488
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, PILANI

K. K. BIRLA GOA CAMPUS


Second Semester 2019-2020
Tutorial Sheet-3

Course No. MATH F242 Course title: Operations Research

Date: Feb 29 , 2020


—————————————————————————————————

Q 1. In a paint manufacturing unit, each type of paint is to be ground


to a specified degree of fineness. The manufacturer uses the same ball mill
for a variety of paints and after completion of each batch, the mill has to be
cleaned and the ball charge properly made up. The change over from one
paint to another is estimated to cost Rs 80/batch. The annual sales of a par-
ticular grade of paint are 30,000 liters and the inventory carrying cost is Re.
1/liter/annum. Given that the rate of production is 3 times the sales rate,
determine the economic batch size ? Determine total no. of batches per year.

Q 2. The demand of an item is uniform at the rate 25 units per month.


Fixed cost is Rs 15 each time a production run is made. The production
cost is Re. 1/item and the inventory carrying cost is Rs 0.30/item/month.
If the shortage cost is Rs 1.50/item/month, determine how often to make a
production run and of what size it should be.

Q 3. A contractor has to supply 10,000 bearings per day to an automo-


bile manufacturer. He finds that, when he starts a production run, he can
produce 25,000 bearings per day. The cost of holding a bearing in stock for
one year is 20 paisa, and set up cost of a production run is Rs 180. How
frequently should production run be made ?

Q 4. The demand of a product is 500 units/week and the delivery rate is


1000 units/week. If the purchase price is Rs 50/unit, the ordering cost is Rs
100/order, the holding cost is Re.1/unit/week. Calculate Q∗ , TCU(Q∗ ).

Q 5. Given the following data for an item of uniform demand, instanta-


neous delivery time and back order facility: Annual demand is 800 units,
cost of an item is Rs. 40, Ordering Cost is Rs 800, Inventory carrying cost
is 40%, Back Order cost is Rs 10. Find out (i)Minimum order Quantity
(ii)Maximum inventory level (iii)Maximum no. of Back orders (iv)Time be-
tween Orders (v)Total annual cost.

Q 6. An aircraft company uses rivets at an approximate customer rate of


2,500kg/year. Each unit costs Rs 30/kg. The company personnel estimates
that it costs Rs 130 to place an order and that carrying cost of inventory
is 10 % per year. How frequently should orders for rivets be placed? Also
1
2

determine the optimum size of each order.

Q 7.You have to supply your customer 100 units of certain product every
Monday (and only then). You obtain the product from a local supplier at
Rs 60/unit. The costs of ordering and transportation from the supplier are
Rs 150/order. The cost of carrying inventory is estimated at 15% per year
of the cost of the product carried. (i) Describe graphically the inventory
system. (ii) Find the lot size which will minimize the cost of the system.
(iii) Determine the optimal cost.

Q 8. A Company purchases a certain chemical to use it in its process. The


demand for the chemical is 1000 kg/month. The cost of one cycle is Rs.
800, and holding cost for one unit is Rs 10/month. The unit cost (in Rs.
per kg.)
 depends on the amount purchased (in kg.) as follows-

 8.00 if 0 − 249

7.50 if 250 − 499
C0 =

 7.00 if 450 − 649

6.75 if 650 and above

Determine optimum purchase quantity.

Q 9. The demand for item in a company is 18000 units per year and the
company can produce the item at the rate of 3000 per month. The cost of
one set up is Rs 500. If the holding cost of one unit per month is 15 paisa,
the shortage cost of 1 unit is Rs 20/unit/month. Determine the optimum
manufacturing quantity and no of shortages. Also determine the manufac-
turing time and time between setups.

Q 10. A commodity is to be supplied at a constant rate of 200 units/day.


Supplies of any amount can be had at any required time, but each ordering
costs Rs 50, cost of holding the commodity in inventory is Rs 2/unit/day,
while delay in the supply of the item induces a penalty of Rs 10 per unit
per delay of 1 day. Find the optimal policy (Q, t), where t is the re-order
cycle period and Q is the economic order quantity. What would be the best
policy, if the penalty cost becomes infinity ?

Q 11. The demand of an item is 225 units/day and the rate of produc-
tion 450 units/day. The cost of holding inventory is Rs 0.5/unit/day. Back
ordering is allowed at the cost of Rs 0.5/item/day. The cost of starting a
production run is Rs 100 per run. The production cost in Rs. per item is
3



2.00 if Q < 200
1.75 if 200 ≤ Q < 500



C0 = 1.50 if 500 ≤ Q < 1000

1.25 if 1000 ≤ Q < 1500





1.20 if Q ≥ 1500
Determine the EOQ, the EBO and the corresponding time of one production
cycle.

Q 12. The demand of a product is 500 units per week and the delivery
rate is 1000 units per weeks. If the purchase price is Rs 50 per unit, the
ordering cost is Rs 100 per order and the holding cost is Rs 1 per unit per
week, calculate Q∗ , T CU (Q∗ ) and the optimum order cycle. Assume that
no shortages is allowed. Assume that there is per unit price discount in the
following
 pattern:


 50 if Q < 100
45 if 100 ≤ Q < 200



C0 = 40 if 200 ≤ Q < 500

38 if 500 ≤ Q < 1000





35 if Q ≥ 1000

Q 13. The demand of an item during a single period has a uniform distribu-
tion in (20, 25). The holding cost on ending inventory is Rs 10 per unit and
shortage is Rs 20 per unit. The demand is instantaneous and purchasing
cost is Rs 15 per unit. If there is no setup cost and the initial inventory is
5 units, find optimal order quantity and optimum expected total cost.

Q 14. Distribution of the demand of certain item is given as

X 2 3 4 5 6 7 8
P (X = x) 0.1 0.1 0.25 0.35 0.05 0.05 0.1
Purchasing cost is Rs 3.00 per item. Holding cost is Rs 1.00 per unit on
ending inventory and shortage cost is Rs 5.00 per unit. Find the optimal
order size and optimal expected total cost if the initial inventory is one.

From Lecture Notes: Problem Set VIII: 6,7 and 8.


************************************

You might also like